A Historical Series of Housing Prices for Spain

Abstract

This paper reconstructs the housing-price series for Spain between the 1960s and 1980s,
using mortgages as a variable to approximate their behaviour. The analysis is in two stages. In the
first, the validity of the variable chosen is demonstrated by evaluating its statistical similarities with
the evolution of prices over the period when both were observed (1987–2014). In the second, a
model is defined for estimating the long-term behaviour of housing prices in relation to the GDP, as
a key indicator of their evolution, and the unit mortgage, in order to predict the housing-price series
retrospectively, i.e., between 1959 and 1986. The calculation stages use ARIMA methodologies in
regression environments to obtain signs of prices and estimate the behaviour and forecasting
model. The logic of the series obtained is then contrasted by analysing major economic events in
Spain, comparing the series estimated with the evolution of housing prices in other countries such
as the United Kingdom, France, United States, Germany, Netherlands, Italy and Japan. This approach
presents similarities in the behaviour of housing prices over a period of 50 years. The series
resulting from the calculation shows how housing prices increased sharply for two decades (the
1960s and 1970s), almost without interruption, with prices in real terms reaching levels that were
similar to those recorded in 2007, followed by a sudden correction whose harshness was similar to
that undergone recently by housing prices in Spain.